truste 2014 us consumer confidence privacy report consumer opinion and business impact

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RESEARCH REPORT

TRUSTe 2014 US Consumer Confidence Privacy Report Consumer Opinion and Business Impact

CONSUMERCONCERN

CONSUMERTRUST

BUSINESSIMPACT

2TRUSTe 2014 US Consumer Confidence Privacy Report

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POWERING TRUST in the Data Economy

INTRODUCTION

2013 saw privacy become a mainstream concern.

The year saw revelations about government surveillance programs such as PRISM,

continued debate over “Do Not Track,” the introduction of new FTC Mobile guidelines,

changes to the Children’s Online Privacy Protection Act (COPPA) and European

concern over international data transfers under EU Safe Harbor to name but a few.

It concluded with the United Nations passing a privacy resolution on “The Right to

Privacy in the Digital Age,” and President Obama announcing changes to the National

Security Agency (NSA) practice of bulk data collection and storage and, in Europe, the

debate over the proposed new Data Protection Regulation intensifying ahead of the

end of the current parliament in May 2014.

Technological advances also brought new privacy implications including the introduction of wearable tech such as

Google Glass, commercial use of facial recognition technology to track shoppers’ in-store activities, increased use

of location-based targeting and the rise of smart devices in what’s being called “The Internet of Things.”

But what is the impact of these new technologies, political debates and media headlines on consumer opinion?

As part of our commitment to helping companies to safely collect and use consumer data to power their

businesses, we wanted to get behind the headlines and find out what effect the events of 2013 have had on

consumer privacy concerns and provide an accurate picture of the potential impact this could have on businesses

in the year ahead.

TRUSTe commissioned independent research to look into the degree and causes of online privacy concern

amongst US internet users. The TRUSTe 2014 US Consumer Confidence Research is part of a long-term

commitment to privacy education from TRUSTe. Now in its third year, this research series offers a valuable

barometer of consumer confidence, business impact and recommended business practices.

Reports from previous years can be found online at truste.com. The 2014 findings will be presented at a series of

events in the US and the UK to coincide with Data Privacy Day on January 28.

If you have questions on the research, or would like additional information on how TRUSTe can help you with your

data privacy management strategy, please let us know.

Best Regards,

Chris Babel

CEO, TRUSTe




EXECUTIVE SUMMARY

The TRUSTe 2014 US Consumer Confidence Privacy Report provides a comprehensive analysis of current

consumer opinions about online privacy across the US. The study was conducted by Harris Interactive, on behalf of

TRUSTe, with more than 2,000 US internet users from December 11 – 13, 2013. A similar report is also available for

the UK.

The research found that consumer online privacy concerns remain extremely high with 92% of US internet users

worrying about their privacy online compared with 89% in January 2013. The high level of concern is further

evidenced by 47% saying they were always or frequently concerned and 74% were more concerned than last year.

All those who said they were more concerned about their online privacy than last year were asked why they were

more concerned. The top two responses were - 58% were concerned about businesses sharing their personal

information with other companies and 47% were concerned about companies tracking their online behavior to

target them with ads and content.

Despite the constant media coverage of US government surveillance programs only 38% listed this as a reason for

their increased concern. These figures are in stark contrast to the number of media articles about online privacy,

which focus on government surveillance over commercial data collection.

The potential impact of this concern over business privacy practices is significant as consumer trust is falling.

Just over half of US internet users (55%, down from 57% in 2013) say they trust businesses with their personal

information online. Furthermore, 89% say they avoid companies they do not trust to protect their privacy, the same

as in January 2013.

70% said they felt more confident that they knew how to manage their privacy than one year ago, but this

can cause consumers to take actions, which negatively impact businesses. Increased privacy concerns, mean

consumers are:

On a positive note, in addition to these actions, 3 out of 4 consumers are more likely to look for privacy

certifications and seals to address their privacy concerns.

Less likely to click on online advertisements 83%

Avoid using apps they don’t believe protect their privacy 80%

Less likely to enable location tracking on smartphone 74%




TRUSTe 2014 US CONSUMER CONFIDENCE PRIVACY RESEARCH

Survey Methodology

The research was conducted by Harris Interactive on behalf of TRUSTe, from December 11-13, 2013.

Questions were asked online of 2,019 adults aged over 18.

The survey data were weighted to be nationally representative of the US Online Adult Population.

Numbers may not always add up to 100% due to computer rounding or multiple answers. Full data tables are

available on request.

DETAILED FINDINGS

Section 1 — Consumer Concern

1.1 Are consumers concerned about online privacy?

Consumer online privacy concerns remain high. 92% of US internet users worry about their privacy online

compared with 89% in January 2013 and 90% in January 2012.

Of the 92% who are concerned about their online privacy, 18-34 aged men are less likely to worry (83%) than women

of the same age (93%). Men aged 65+ are more likely to be concerned (97%) than women of the same age (91%).

1.2 How often are they concerned about online privacy?

What is the extent of privacy concern? Respondents were asked how often, if at all, they worried about their online

privacy. 47% said they were always or frequently concerned, 45% were sometimes concerned. Just 8% have never

worried about the issue compared with 11% in January 2013.

1.3 What online activities cause them to be concerned?

This research was conducted in mid-December during the peak of the holiday shopping season. Online shopping

continues to be the activity that causes the greatest levels of concern with 93% of US consumers now worried

about their privacy when shopping online, compared with 89% in January 2013.

0

1

2

3

45

6

7

8

9

10 9.2

“How often do you worry about your privacy online?”

Never

Sometimes

Frequently

Always

92%WORRY

8%

45%21%

26%




Privacy concerns have also increased across other online activities. 90% were concerned about privacy when

banking online compared with 86% in January 2013. 90% of those who used social networks worried about their

privacy when using these sites compared with 87% in January 2013.

There has also been a significant rise in privacy concern when using mobile apps, with 85% of smartphone users

now worried when using apps compared with 77% in January 2013.

1.4 Has concern about online privacy increased since last year?

Respondents were asked about whether their privacy concerns had changed from one year ago. 74% of US

internet users are more worried about their online privacy than one year ago.

A higher percentage of those over age 55 (78%) are more worried about their online privacy than one year ago.

The groups that are least concerned compared with last year are men aged 18-34 (67%) and women aged 35-44

(69%).

Perhaps surprisingly, the increase in privacy concerns is lower (66%) in families with children compared to those

without (77%). Other factors such as income, education, employment, marital status and home ownership appear

to make little difference to growing online privacy concerns.

74% of internet users are more worried about online privacy than one year ago 74%

Activities Where Consumers have Privacy Concerns

89%

93%

86%

90%

87%

90%

77%

85%

Online Shopping

Banking Online

Using Social Media

Using Mobile Apps

2013

2014




Section 2 — Reasons for Concern

2.1 Why have online privacy concerns increased?

All of the respondents who indicated that they were more concerned about their online privacy this year than last

year (74%) were asked what had caused them to be more concerned.

Businesses sharing personal information with other companies (58%) and tracking online behavior to show

targeted ads and content (47%) were the two largest causes of increased online privacy concerns.

Despite the constant media coverage of US government surveillance programs such as the NSA’s PRISM, only 38%

listed this as a reason for their increase in privacy concerns.

29% were concerned about the privacy policies of Facebook and other social media networks, 24% were

concerned about companies tracking their location on their smartphone and 21% were concerned about the

privacy policies of Google and other search engines.

2.2 Does everyone share the same reasons for concern?

There were some differences in the causes of concern in different age groups. Businesses sharing personal

information online with other companies, was the top cause of concern amongst all age groups apart from 18-34

year old men who were more concerned about government surveillance programs.

The second highest cause of concern for everyone over 35 was companies tracking their online behavior to provide

targeted ads and content. For 18-34 year olds the second highest cause of concern was government surveillance

followed by online tracking.

Top 6 Reasons for Increase in Online Privacy Concerns in 2013

58%

47%

38%

29%

24%

21%

Businesses sharing my personalinformation with other companies

Companies tracking my online behaviorto target me with ads and content

Reports of government surveillanceprograms (e.g. NSA, PRISM) in the media

Privacy policies of Facebookand other social media sites

Companies tracking mylocation via my smartphone

Privacy policies of Googleand other search engines




2.3 Detailed analysis of top causes of privacy concerns

2.3.1 Businesses sharing personal information with other companies

Overall 58% of those whose concerns about online privacy had increased in the last year listed businesses sharing

personal information with other companies as a cause.

This was the greatest concern for retired people (74%) followed by those who left education after high school

(63%) and the unemployed (63%).

Concerns increase sharply with age with 42% of 18-34 year olds listing companies sharing personal information as a

reason for concern, rising to 74% of 65+ year olds.

The greatest level of concern (76%) was amongst women aged over 65. 62% of married people were concerned

about businesses sharing their personal information compared with 52% of those who were not married.

2.3.2 Companies tracking online behavior to provide targeted ads and content

Concerns about companies tracking online behavior to provide targeted ads and content increased sharply with

age and peaked amongst those aged 55-64.

Online tracking to provide targeted ads and content was less of a concern amongst students (37%) than for retired

people (55%).

53% of married people were concerned about companies tracking online behavior to provide targeted ads and

content compared with 40% of those who were not married.

0

20%

40%

60%

80%

Age Groups18 – 34 35 – 44 45 – 54 55 – 64 65+

0

15%

30%

45%

60%

Age Groups18 – 34 35 – 44 45 – 54 55 – 64 65+




2.3.3 Media reports of government surveillance programs such as NSA’s PRISM

Overall 38% of those whose online privacy concerns had increased over the last year attributed this to media

reports of government surveillance programs such as the NSA’s PRISM program.

This was the third highest concern for 35-65 year olds. For 18-34 year olds and those over 65 government

surveillance was their second highest concern and more of a concern than online tracking.

In general, men were more concerned about government tracking them (44%) than companies (38%) whereas

women were more concerned about companies tracking their activities (41%) than the government (32%).

Students (43%) were also more concerned about reports of surveillance programs (43%) than companies tracking

their web surfing behavior (29%).

2.3.4 Privacy policies of Facebook and other social media sites

Overall 29% of internet users attributed their increase in online privacy concern to the privacy policies of Facebook

and other social media sites. However these concerns were greater amongst certain groups rising to 36% of college

graduates and 34% for parents of children under 18.

2.3.5 Companies tracking my location data via my smartphone

Overall 24% of internet users attributed their increase in online privacy concern to companies tracking their location

via their smartphone. These concerns were significantly higher amongst younger people whether male or female.

These figures are based on all internet users so are likely to be significantly higher as a proportion of smartphone users.

2.3.6 Privacy policies of Google and other search engines

21% of internet users listed the privacy policies of Google and other search engines as a reason for the increase in

their online privacy concerns. For younger people this is the lowest concern, however for over 55 year olds this is

more of a concern than location-based tracking. This is particularly the case amongst older men. 29% of men aged

55-64 are concerned about Google’s privacy policies, whereas location based tracking is only a concern for 16% of

this age group.

0

10%

20%

30%

40%

Age Groups18 – 34 35 – 44 45 – 54 55 – 64 65+




Section 3 — Consumer Trust

3.1 Do consumers trust companies to protect their online privacy?

Consumer trust decreased from last year. 55% of US internet users trust businesses with their personal information

online, compared with 57% in January 2013 and 59% in January 2012.

In general, men over 45 are less likely to trust companies with their personal information online than women of the

same age. For example, 53% of men aged 55-64 do not trust companies with their personal information compared

with 39% of women of the same age.

3.2 What is the level of consumer mistrust?

Respondents were asked to what extent they agreed with the statement “I trust most companies with my personal

information online.” 45% strongly or somewhat disagreed with this statement, 47% somewhat agreed. 7% strongly

agreed that they trusted most companies with their personal information online compared with 9% in January 2013.

0

1

2

3

45

6

7

8

9

10

5.5

Strongly Disagree

Somewhat Disagree

Somewhat Agree

Strongly Agree

“I trust most companies with my personal information online.”

55%AGREE

16%

29%47%

7%




Section 4 — Business Impact

4.1 Business impact of online privacy concerns

The business impact of online privacy concerns remains high. 89% of US internet users say they avoid companies

that do not protect their privacy compared with 89% in January 2013 and 88% in January 2012.

When it comes to avoiding companies where consumers have online privacy concerns, there is little difference

between men and women but age is a major factor. 83% of 18-34 year olds avoid businesses they do not trust

rising to 96% of over 65 year olds.

4.2 To what extent do consumers avoid businesses they don’t trust?

Respondents were asked to what extent they agreed with the statement “I avoid doing business with companies

who I do not believe protect my privacy online.” 53% strongly agreed with this statement, 36% somewhat agreed,

9% somewhat disagreed. 2% strongly disagreed that they avoided doing business with companies that they didn’t

believe protected their privacy online.

4.3 Effects of privacy concern on consumer behavior

70% of US internet users feel more confident that they know how to manage their privacy online than one year ago

but what does this mean for businesses? As consumers become smarter about managing their privacy and decide

to opt out of services such as location tracking, could this hinder business’ ability innovate? A series of additional

questions were asked this year that looked in more detail at the potential business impacts of consumer online

privacy concerns.

Enabling consumers to take control of their online privacy can help with 76% consumers more likely to look for

privacy certifications and seals to address their privacy concerns.

0

1

2

3

45

6

7

8

9

10

8.9

Strongly Disagree

Somewhat Disagree

Somewhat Agree

Strongly Agree

“I avoid doing business with companies who I do not believe protect my privacy online.”

89%AGREE

9%

36%53%

2%

Top 4 Consumer Actions due to Online Privacy Concerns

83%

80%

76%

74%

Less likely to click ononline advertisements

Avoid using apps they don’tbelieve protect their privacy

More likely to look for privacycertifications and seals

Less likely to enable locationtracking on smartphone




CONCLUSION

Businesses Need To Do More To Build Online Trust

Privacy concerns are growing with 74% more concerned about their online privacy than a year ago. Despite the

constant media coverage of US government surveillance programs such as NSA’s PRISM, this is not the main

driver of online privacy concerns. People are far more concerned about businesses sharing personal information

with other companies and tracking their online behavior to show targeted ads and content than anything the

government is doing.

Many companies have already responded to growing consumer concern and are improving their privacy practices,

but the bar continues to rise. For those who have not yet realized the importance of this issue, they are going to be

left behind by their competitors.

But consumer concern is just one of the challenges businesses face in 2014 as the privacy landscape continues

to get more complex in terms of regulation and technology. 2013 saw changes to the COPPA, continued debate

over “Do Not Track,” the introduction of new FTC Mobile guidelines and European concern over international data

transfers under EU Safe Harbor.

The good news is that there are a number of different ways in which businesses can help consumers to manage

their online privacy and build trust. These include privacy assessments and certifications to build and demonstrate

best practices, alongside tools for managing consumer advertising preferences, monitoring site and app tracking

activity, and cookie consent preferences under the EU Cookie Directive. This research showed that 76% are more

likely to look for privacy certifications and seals due to concerns about their online privacy.

In the year ahead, companies need to innovate to succeed but these findings show they also need to proactively

address online privacy concerns to stay ahead of the competition, minimize risk and build online trust.




ABOUT TRUSTe

TRUSTe is the leading global Data Privacy Management (DPM) company and powers trust in the data economy by

enabling businesses to safely collect and use customer data across web, mobile, cloud and advertising channels.

Our cloud-based Data Privacy Management Platform delivers innovative technology products, including website

monitoring and advertising compliance controls – along with privacy assessments and certifications.

More than 5,000 companies worldwide, including Apple, Disney, eBay, Forbes, LinkedIn and Oracle rely on our DPM

platform and globally recognized Certified Privacy Seal to protect/enhance their brand, drive user engagement and

minimize compliance risk.

FURTHER INFORMATION

A full list of TRUSTe’s Privacy Research reports, including the Consumer Confidence Privacy Indexes for 2013 and

2012, can be found at www.truste.com/resources/#/Privacy_Research.

For more information, please see www.truste.com or contact [email protected]

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